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Ventilator Manufacturer Expands into Consumables Market

By Miriam Bello | Thu, 05/13/2021 - 15:25

Q: The pandemic drove up global demand for ventilators and disposables. How has Dräger balanced this excess demand with regular demand?

A: We experienced high demand for ventilators and N95 masks for respiratory protection. In the case of ventilators, we tripled production compared to previous years. The main problem was to coordinate the demand from countries around the world. The availability of ventilators was very low because everything was compromised but sales have been considerably higher since last year.

The company opened two new factories to address demand for respiratory protection equipment. We have a factory in Sweden and another in South Africa. We started collaborating with China and we built a factory in North America to respond to US consumption and another in France to address demand from the EU. The latter factory is also addressing demand from Mexico. In the case of equipment accessories and consumables, we worked with the factory's suppliers to make sure there was enough raw material to increase production. Globally, the company distributed everything that was produced among all countries according to their usual consumption but we fell short because there was excessive demand.

In Mexico, the government has been requesting information regarding ventilators and we are trying to speed up the process so that decisions can be made and tenders can start.

Q: Last year, Dräger posted record earnings as a result of global product demand. How will Dräger reinvest this profit?

A: We opened two factories for the respiratory protection division and we are also investing in consumables to increase capacity. In addition, we have invested heavily in research and development. We will launch new products once they go through the certification process.

In the Mexican market, we are expanding into new business areas to support small hospitals that do not have the capacity to purchase our latest technologies even through financing. We have direct rental programs with hospitals in which they pay us a monthly fee and we provide the equipment and consumables for their surgeries and services. We have other programs to provide integral services, in which we set up the entire operating room and charge customers for its use. This is a riskier investment for us because we can only charge a fee if a client uses the operating room. We are using our profits to be able to offer better financing to our clients and to reach those small hospitals and clinics that do not have the budget to buy our equipment outright.

Our services team did a very important job during the pandemic in getting most of the equipment up and running for any patient who needed it. We are now looking at how we can reach out to the government so that the engineers who are still working at COVID-19 hotspots can be vaccinated as soon as possible.

Q: The means to supply medical devices to Mexico’s public sector changed after the government began acquiring products from UNOPS. How did Dräger manage this change?

A: The main change we are addressing is working with INSABI because it has not established a way to expedite purchases. During the past year, we struggled to collect payments related to the purchases it made during the pandemic. We are still collecting to this day but because of the constant changes in administration we have to restart everything from scratch.

Q: Dragër’s interconnected digitalization protocol among devices was to be adopted in the EU last year. How has that progressed and when will it come to Mexico?

A: Many programs that existed before COVID-19 were put on pause due to the need to address the urgency of the pandemic. However, we did move forward with the program. In Latin America, one hospital has already contracted this interconnection system. In Mexico, we are working to implement it in a reference hospital to improve our visibility. Our products already include technology to communicate with hospital networks and other equipment.

Q: How will you repurpose newly opened plants after the excess demand for COVID-19 medical supplies wanes?

A: Ventilator production did not require a new plant. The existing plant was working one shift and with the emergency it started to work three. There has been a reduction in production and, although demand continues, it is not as high as it was in early 2020. In the case of respiratory protection, we were not one of the main producers but this plant will allow us to gain share in the market and become an important competitor globally and in Mexico. We have increased our production capacity in 10 times.

Q: What products will Dragër next introduce to the Mexican market?

A: We have a new anesthesia workstation, Atlan, that is going to replace several of the existing platforms. We also offer the new V600 and V800 ventilators. For the neonatal sector, we have the VN600 and VN800. We also have new products related to monitoring, hospital infrastructure and products related with COVID-19 as high flow oxygen system and oxygen therapy.

 

Dräger is a German company specialized in medical technology and safety that produces solutions for hospitals, fire departments, emergency services companies, government agencies, mining and other industries.

Miriam Bello Miriam Bello Journalist and Industry Analyst